Oil prices dropped on Wednesday as industry data led to a significant build in crude oil and distillate stocks in the United States, the world’s biggest oil consumer, and pressure fixed on OPEC to boost supply.
Brent crude futures were under $1.38, or 1.6%, to $83.34 per barrel at 0950 GMT. U.S. West Texas Intermediate (WTI) crude futures fell $1.60, or 1.9%, to $82.31 per barrel.
According to Edward Moya, senior analyst at OANDA, crude prices are decreasing following the API reported the sixth continuous week of crude oil inventory builds. The Biden administration exhausts every plausible argument to OPEC+ members before tapping their Strategic Petroleum Reserve.
President Joe Biden, talking at a climate summit in Glasgow, criticized a surge in oil and gas prices on a rejection by OPEC nations to pump more crude.
OPEC+ meeting ahead
The Organization of the Petroleum Exporting Countries and its partners, a group is known as OPEC+, convene on Thursday to reconsider its policy and reconfirm plans for monthly increases.
According to Stephen Brennock of broker PVM, the producer group will maintain its 400,000 BPD monthly supply rises. This, in turn, should save this quarter’s supply shortage.
As stated by market sources quoting American Petroleum Institute figures on Tuesday, U.S. crude and distillate fuel stocks increased last week while gasoline decreased. [API/S]
Crude stocks increased by 3.6 million barrels in the week closed on Oct. 29. Gasoline inventories dropped by 552,000 barrels, and distillate stocks rose by 573,000 barrels. The data presented who spoke on condition of anonymity.
Data from the U.S. Energy Information Administration, the statistical arm of the U.S. Department of Energy, will be published later on Wednesday.
In a hint that high prices stimulate supply elsewhere, BP (NYSE: BP) stated on Tuesday that it would ramp up investments in its onshore U.S. shale oil and gas business to $1.5 billion in 2022 from $1 billion this year.